To summarize, I got a high-paying job and decided to get a $40k truck and a brand-new jet ski. I initially leased the truck, but because of my job, I went way over the mileage limit and ended up buying it. Now I still owe about $33k on the truck, but it’s only worth around $23-24k. My monthly payments are $815. I’m not sure what to do should I take a big loss, sell the truck, and pay the $10k difference to get something more reliable? Or should I roll over the remaining balance into a new lease and buy a cheaper car for long drives? I still owe $10k on the jet ski as well. I realize I made some poor decisions, but I’ve been much better with money since 2021, when I first leased the truck. I’m just looking for some guidance now.
I know that you know you messed up, but I just gotta reiterate how crazy a 815 a month truck payment is, let alone what the insurance is. I therefore assume that you are paying an absurd amount each month—more over $1k—for the note, gas, and insurance. Sell the automobile and accept the value loss—it will be easier to pay down $10,000 than $30,000. Purchase a used Toyota. Let this serve as a harsh lesson: never take out a loan for a car; if you do, the amount for insurance and interest should never exceed 10% of your monthly salary. For my part, I would never pay more than 7% of my monthly income toward these expenses.
You’re right, but it’s not an option to receive a whole shitbox. Considering I get $500 a month from my job to drive a truck, neither is a car. This payment, along with gas and insurance, have prevented me from saving, so I’ll just be getting into debt once more hopefully less depending on what I discover.
Because of the current status of the market, you won’t receive less. Unless you have stellar credit and a good downpayment. You don’t get to pick what car you drive when you don’t have many possibilities. Having something is preferable to having nothing.
What are your thoughts on selling the truck right away or refinancing at the same interest rate that I’ve been offered?
What terms apply to refinancing? is it a good interest rate and payment? Remember that refinancing creates a new loan with new conditions. In my opinion, if I were in your shoes, I would sell the truck and look for a trustworthy replacement. It is a very bad idea to roll over a loan onto a new lease or car, particularly if you still owe $33,000.
Make sure refinancing works into your budget and leaves money for savings and other costs if you decide to remain with it. Never hesitate to look around for better deals.
Excellent guidance right here. Never rent a place again. recently purchased my second lease. Fortunately, I can probably sell it for close to what I owe. Had I purchased it three years prior, the interest rate would have been 4% rather than 9.4%, and the payment amount would have been lower.
What then are you doing with the equity that is negative? Including it in a new loan? That is insane. All you have to do is work hard to pay off the truck and keep it. Take the difficult lesson to heart. Keep it if it’s new and trustworthy.
Financially the math isn’t making any sense to me whatsoever. You earn $70k before taxes, which means your monthly income is between $4500 and $4800. You have a $150 housing payment and reside at home. Thus, 4300–4600 remain. You only have to pay $315 a month for the truck plus gas and insurance because you receive a $500 monthly vehicle allowance. Only every other month is there a jet ski payment. I’m not sure what that is, but I’m curious in what happens to the additional $4000+ every month. No, the math isn’t working.
When you make $60k to $70k, you can afford to owe $33,000 on a truck. Though not ideal, it is feasible.
Can you sell the jet ski, though, as you most likely can’t afford it too? Perhaps you could even consider taking out a $3–$4k personal loan that you could repay over the course of 12–18 months?
I’m going to be hard on you for a little.
My recommendation is:
Get something else by selling the truck.
When not in use, rent out the jet ski (I know there are markets where this is required and has a high cash value)Take it easy on yourself.Continue.
Use any effective strategy to pay off the debt as soon as you can—avalanche, snowball, etc.
Please update us and best of luck.